“This greed was beyond irresponsible” was how the Financial Times of London describes the cause of the greatest financial melt down since the Great Depression. It as accurately applies to the origins of our local Convention Center / Hotel project.
First a disclaimer before the revelations to follow: The convention center and hotels are realities and deserve public support and patronage. We do not bite off our nose to spite our face!
When three years ago future NewsLanc founder and publisher Robert Edwin Field first expressed his concern about the viability of the proposed downtown 300 room Marriott Hotel, he was told by the CEO of a very prominent bank with special insights into the project that “He wouldn’t loan a nickel for the hotel.” (Field won’t say what bank, but you can guess.)
Later when Convention Center Authority and Penn Square Partners were shopping for an institution to guarantee the mortgage bonds, not only did statewide and national banks rebuff overtures, but a volunteer provided valuable analysis to enable Field and NewsLanc to speak knowledgeably to the County Commissioners and the Authority and to write accurately on the subject.
Wachovia Bank ultimately agreed to guarantee the bonds despite ample warning not to from the PKF Consultants Feasibility Study and from knowledgeable private citizens. Is there any wonder that Wachovia’s dubious lending practices has caused its stock to drop from over $50 a share a year ago to under $10 on Wednesday? (Will the bank survive the current crisis?) In contrast, PNC’s stock has remained stable over the year around $70 a share.
The only professional feasibility study ever produced (at the request of the county commissioners) was denounced and ignored by the Authority, conduct which exemplifies then Chair Ted Darcus’s irresponsible actions and brings in question his motivations. (At the same time millions of dollars were questionably spent and some believe corruptly used to ram through the project over overwhelming lack of public support. A Fox 43 News poll established that 78% of those with an opinion opposed county guarantees of convention center debt.)
As for “Greed beyond irresponsibility”: Look to the Lancaster Newspapers Inc. and the High Group. Fulton Bank stopped investing in the project and thereby reduced its partnership share long before the project received approval. It then withdrew from Penn Square Partners soon thereafter.
